Logistics operators preparing for growth

UKWA roger williamsDespite the pressure of high fuel and other operating costs, more than half (51%) of UK third party logistics (3PL) companies expect to invest more in equipment, people and premises in 2014 than they did in 2013.

This was one of the findings of 3PL 2013 – a recent survey of warehouse operators undertaken by the industry’s trade body UKWA.

UKWA said the findings would be welcomed by suppliers to the industry and reflected a renewed sense of optimism across the logistics sector.

The majority of respondents (53%) expect to see their investment in IT increase next year, while 49% are preparing to spend more on their vehicle fleets. Extra staff (47%), bigger premises (47%) and materials handling equipment (39%) are other areas where respondents predicted that they will be spending more. Only 10% foresaw a decline in their year-on-year spending.

The survey also showed that in 2013 most workers (61%) employed in the sector received a modest pay rise with the majority (67%) being awarded an increase of 3% or less while 33% enjoyed an above-inflation salary boost of between 3 and 5%. Nearly half (47%) expect to be able to give a general pay rise to all staff in 2014.

When asked to rate the greatest threats to their business, respondents cited increased price competition, cost inflation (particularly fuel) and red tape.

The majority of respondents (82%) had increased the cost of their services by up to 5% to cover rising fuel charges. A small number (5%) raised their prices by more than 10% to offset the rising price of fuel.

But respondents had other ways of countering fuel costs in addition to price hikes. 35% had introduced fuel monitoring technology and put more emphasis on better driver training, while some companies (12%) had sought to mitigate the impact of fuel price rises by negotiating fixed rate deals from their suppliers and others (12%) had switched fuel suppliers.

Despite concerns about fuel prices, there appears to be little appetite within the sector to embrace rail as an alternative to moving goods by road. When asked if they are likely to use rail transport to distribute products over the next 12 months 82% responded ‘rarely’, 11% answered ‘sometimes’ and just 7% said ‘regularly’.

Commenting on the findings, UKWA chief executive Roger Williams (pictured) said the survey provided a useful snapshot of the industry as it emerged from one of the longest and most difficult economic downturns many people could remember.

This material is protected by copyright Ken Hurst 2013.

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About Ken Hurst

Ken Hurst began his career as a journalist in London over 30 years ago, working on a range of publications before moving on to weekly newspaper production in the newly-independent Zambia of the 1970s. He returned to the UK where his work included spells on newspapers and magazines, before moving to head up Norwich Union’s corporate affairs division. In the 1990s he moved on to freelance, co-own and publish the B2B audio magazine Sound and front the BBC radio Yesterday’s Papers programme. There followed six years as Business Editor at Britain’s biggest selling regional daily newspaper, The Eastern Daily Press, where he led an award-winning team and for whom he still writes a weekly socio/political comment column. Subsequently, he was Group Editorial Director at CBM, responsible for its UK and US magazine output – including The Manufacturer magazine – research-driven industry reports and live events content. Currently he is Contributing Editor at Works Management magazine publisher Findlay Media and Chairman of the consumer publishing house TNT Multimedia Ltd. He is a Fellow of the Royal Society of Arts and of the British Association of Communicators in Business.
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